The present method of providing food for needy persons who are dependent on public assistance is the distribution of coupons which are known as food stamps. Books of coupons are issued to recipients. The value of the various coupons in each book may be $1.00, $5.00 and $10.00 and the total value of each book typically does not exceed $65.00. The coupons in each book have identical serial numbers, but no two books have the same serial numbers.
The wording on each coupon states that it is non-transferable and a statement on each coupon book warns of severe penalty for any improper use of a coupon. Yet a food merchant may, as change, issue food stamps taken from a different coupon book. This makes it impossible for another store receiving these food stamps in a subsequent transaction to know whether the holder of these food stamps is their true owner.
Furthermore, the recipient of food stamps is not required to present any identification or other proof that he or she is the true owner of the food stamps issued to him or her.
The looseness of the present method of distribution of food stamps invites a variety of improper uses--ranging from paying for a baby sitter or car repairs to selling the food stamps for cash with which to purchase drugs. Misuses of a more petty nature grow out of cash change which is given to the welfare recipient in almost every cash transaction.
Not only does the present system of food stamp distribution invite fraudulent practices, it often subjects worthy, underprivileged citizens to ridicule. Some of these citizens relate stories of grocery store clerks who make a point of handling food stamps in a manner which attracts the attention and scorn of others in line at grocery store checkout counters. The apparent purpose of this practice is to embarrass the shopper who is using the food stamps to buy groceries.
In addition to the obvious faults of food stamp systems similar or comparable to those described above, millions of trees are destroyed each year to provide the tons of paper for food stamps and record keeping by all of those employees who are needed to account for the use and disposition of food stamps turned in by merchants and who are needed to estimate the lost, destroyed or unspent stamps.
Thus, there is a need for a new system that will prevent the fraud and waste which now appear to be common through the use of food stamps and which, through the use of an efficient system, will eliminate the excessive cost of administering the present system. These goals may be achieved without reducing any needy recipient's allocation. The system should also be adaptable for use in administering other social services, e.g., medical services, as well as for other debit/credit card applications where efficiency, fraud and waste are of concern.